Bayes hosts national push towards a cleaner maritime industry

Academics and shipping industry leaders assessed the maritime sector’s push to cut greenhouse gas emissions at a national conference in London last week.

Bayes Business School hosted the conference on behalf of the UK National Clean Maritime Research Hub, a 5 year programme of research funded by the Engineering and Physical Sciences Research Council, the Department for Transport (DfT), collaborating universities and industry. The hub brings together 13 universities – led by Durham University and including Bayes, City, University of London – along with 72 project partners to harness the depth, breadth and diversity of research being undertaken in the UK to foster collaboration, drive forward innovation and lead sector transformation.

Several speakers highlighted the need for public investment – including incentives and mixed vessel ownership models as part of a commercially operated policy framework.

Keith Johnstone, Assistant Director of Regulatory Innovation at the Maritime and Coastguard Agency (MCA), addressed recent regulatory changes, such as the Marine Guidance Notice 664, a certification process for vessels using innovative technology. He also noted the forthcoming IMO guidelines for ammonia and hydrogen as fuels.

Taking the long view

Mr Johnstone highlighted the need to future-proof policies for emerging technologies in the maritime sector and the importance of academia and industry working together, and working with policymakers when developing new regulations around alternative fuels such as hydrogen, methanol and ammonia.

“We're also looking closely at the development of nuclear small modular reactors particularly molten-salt reactors… potentially for larger ocean-going vessels,” Mr Johnstone said.

The MCA’s work includes a focus on public safety, especially with the increased use of ammonia and hydrogen, and the need for a comprehensive disaster planning approach, as well as partnership working with the Health and Safety Executive and other government bodies to ensure a seamless transition to decarbonised maritime operations.

Dr Ioannis Moutzouris, Onassis Senior Lecturer in Shipping Finance and Analytics at Bayes, who is leading the research hub’s “Digitisation, Maritime Operations, and Finance” workstream, presented his recent research work around the financial and economic challenges of shipping decarbonisation.

“Most of the literature has focused on the technological and regulatory changes but not on the economic and financial aspects which are rather overlooked,” he said.

Dr Moutzouris pointed out that the investment decisions of shipowners in recent years are complicated due to technological and regulatory uncertainty and the inadequacy of current financial incentives for eco-friendly vessels.

The paper he co-authored revealed that for the largest dry cargo ships (vessels classed as ‘Capesize’), eco-friendly vessels are on average 23 per cent more expensive than conventional vessels – yet their long-term earnings are only 10 per cent higher.

“So, the long-term cash flows do not justify this investment. There is a mismatch between the investment costs for eco-friendly vessels and their earnings, with green finance offering only marginal benefits.”

In addition, Dr Moutzouris emphasised that while around half of newly ordered vessels can burn alternative fuels, this means that the remaining 50 per cent of those will still be burning oil for the next 20-25 years. Most of these alternative-fuel capable vessels will burn liquified natural gas which emits less carbon dioxide than oil but is not a ‘green’ fuel.

Professor Tony Roskilly, Chair of Energy Systems at Durham University and Director of the Hub, said, the research is focussed on five key outcomes:

• Advances in the scale up in marine fuels and their safe use
• New and efficient low-carbon power and propulsion
• Decarbonising energy systems and infrastructure
• Reducing energy demand through advanced vessel design and increased efficiency
• Advances in maritime operations, exploitation of digitalisation and green finance.

Professor Roskilly said: “The Hub’s research will have environmental, economic and social impact – not only by reducing GHG emissions and reducing air pollution, but by boosting job creation, cutting shipping costs and improving the market.”

He also highlighted the hub’s focus on equality, diversity and inclusion and support for building capacity and skills.

Mark Simmonds, Director of Policy and External Affairs at the British Ports Association (BPA), urged the DfT to play a more active role in supporting his members and the wider industry to decarbonise.

The BPA, he said, recently announced a new industry initiative, the 'Net Zero Maturity Assessment'. This is a benchmarking assessment for port operators to compare their decarbonisation efforts.

“We're hoping that this will help us (ports) understand where we're doing well and perhaps where we need to speed up on their journey,” he said.

“Ports have bold ambitions for reducing emissions, but action is needed from the government to support and smooth the transition,” Mr Simmonds said.

The government and other stakeholders must act to remove barriers to accessing the national grid and contribute to the significant upfront costs of providing shoreside electrical power to a ship at berth while its main and auxiliary engines are shut down.

In its recent pre-election ‘manifesto’, the BPA called for ‘intelligent’ regulation.

Mr Simmonds said: “Ministers need to set frameworks and not dictate particular solutions. Don't tell us what technology to use. Tell us where you want us to get to and then help us get there. We also need regulators that are competent, intelligent and unafraid to take risks to enable us on this journey.”